What is the term for the process of creating personal experiences by selecting, organizing, and interpreting information?

The term for the process of creating personal experiences by selecting, organizing, and interpreting information is perception. Perception is crucial in personal finance as it influences how individuals interpret financial information, make decisions, and approach their financial goals.

Through perception, individuals filter information based on their previous experiences, beliefs, and values, which shapes their understanding and responses to various financial scenarios. This cognitive process is essential for assessing situations, such as evaluating the benefits of a financial product, understanding market trends, or making budgeting choices. By recognizing how perception affects their financial decisions, individuals can become more aware of potential biases, leading to better informed and more rational choices.